What are the principles governing the exercise of discretion to set aside a default judgment?

The principles in Chitel v. Rothbart and Peterbilt can be summarized as follows. On a motion to set aside default judgment, the motions judge should consider whether (i) the default was unintentional and there is a valid reason for the default; (ii) the motion to set aside the judgment was served forthwith after the judgment came to the moving party’s attention; and (iii) an arguable defence on the merits exists. These principles governing the exercise of discretion to set aside a default judgment are not, however, rigid preconditions, such that the failure to satisfy any one of them necessitates the dismissal for a motion to set aside. The court must ultimately determine whether the interests of justice favour an order setting aside the default judgment. In doing so, it will have regard to the potential prejudice both to the moving party and the respondent, and the effect of any order on the integrity of the administration of justice.